Tesla’s sales plunge over the last 18 months has been a stunning turn for a company that recorded only one quarterly year-over-year sales drop before 2024. And the company faces significant trouble ahead.

Investors already know that second-quarter sales fell a record 13.5% compared to a year earlier, the second straight quarter in which its sales were off at least 13%.

But a second-quarter earnings report, due after the market closes at 4pm ET, could shed light on other, potentially bigger problems as well, as the company faces losing its title as the world’s biggest EV maker to China’s BYD.

The first-quarter sales drop sparked an even larger 71% drop in net income in that period. Tesla is expected to post another decline in the second quarter, albeit not as large. Analysts estimate net income dropped about $350 million, or nearly 24%, in the March through June period.

Looking ahead, though, a $7,500 tax credit for US EV buyers will go away in October, which could force the company to further cut prices, and thereby profit margins, to support sales. US buyers account for nearly half of Tesla’s sales.